A Continuous-Outcome Expected Utility Theory of War

Abstract

A continuous-outcome expected utility model is presented that generalizes the expected utility theory of Bueno de Mesquita. An examination of the more general model uncovers several unstated assumptions within and produces new conclusions from, while supporting the basic logic of, the expected utility theory. Among the new conclusions is the finding that nations shifting their level of acceptable outcomes to a conflict upward or downward after fighting starts is perfectly consistent with a rational model. The derivations demonstrate the value of theoretical articulation, a task too often neglected in quantitative international relations, and provide a sound logical basis for the construction of systemic theories based upon the expected utility theory.

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